FUNAI ELECTRIC CO., LTD. 2022-2023

[Quick Reference of Funai Electric]

FEATURE OF
FUNAI ELECTRIC
Domestic sales of
FUNAI brand products in
YAMADA HOLDINGS CO., LTD.
In Japan, FUNAI began exclusive sales of FUNAI brand 4K
TVs with built-in HDD at Yamada Denki (now YAMADAHOLDINGS CO., LTD.) in 2017, expanding its lineup to
include BD recorders, nail art printers, and gaming monitors.
In 2022, FUNAI branded “FireTV” has been sold by
Yamada Holdings, further increasing brand awareness.

Aggressive glo

A history of innovation,
more than 60 years
Funai Electric, born in Osaka during the high-growth period, hascontinued to provide innovative products demanded by the times
for over 60 years.

2018

1959
Transistor radios
explode in sales.

01

1985

1987

Launched tele-video,with more than 60%
market share in
North America.

Launched the world's
first automatic breadbaking machineFirst ever OLED TV
with built-in hard disk launched

LCD TV sales No.1 Japanesemanufacturer in North American market
In the North American market, the company sells flat-panel
TVs mainly under the Philips and Sanyo brands. The company
maintains the top market share as a Japanese manufacturer. It
also sells Blu-ray disc players and has established itself as an
AV manufacturer in the North American market.

obal expansion
Boldly expanding into BtoB businessWe are also actively developing BtoB business, including
print solution business such as industrial ink cartridges,
medical-related business such as dental CT scans, andautomotive-related business such as backlight systems.

Dental CT Scan
(PreXion Corporation)02

[ Corporate Philosophy ]CORPORATE PHILOSOPHY

Corporate Philosophy Framework
The Fundamental Principle, Corporate Precepts, and Corporate Commitments are the foundationand supporting pillars of our corporate activities, and clearly express the founding spirit.
The Corporate Philosophy and Group Vision were established in 2018, based on these pillars. They convey
the corporate image and guidelines for conduct, and evolve with the times and social conditions.

Fundamental Principle

Dream with Conviction, andAct on Information
Management Philosophy

Challenge the company to growby becoming helpful in the community
Group Vision

Funai creates products that are the choice ofpeople around the world“ Around the world, ” as a global company“ The choice,” aiming for top share in the industry“ Creates products, ” that people will love
Contents

03

01 Quick Reference of Funai Electric

09 ESG initiatives

03 Corporate Philosophy

11 History and Product05 At a Glance

13 Corporate Governance07 Core Competence

14 Corporate information

CORPORATEMESSAGE
Funai Electric will celebrate our 60th anniversary last year, in 2021.
Throughout our history, we have delivered reasonably priced, high-quality digitalconsumer electronics to the market, including transistor radios, VHS videotape recorders, combo
television units, inkjet printers, home fax machines, DVD players, BD players, and OLED TVs withbuilt-in HDD. We have also globalized our business from an early stage, developing markets in regions suchas North America and providing products with competitive edges compared to other companies.
The rise of Chinese TV manufacturers has caused a fierce price war in the TV market, which is now facing
increasingly intense competition. The rapid proliferation of information technologies and the Internet has also significantly
transformed business practices, lifestyles, and social structures.
It is critical to keep pace with our customers’ needs and demands and build marketing and development capabilities toenable prompt delivery of new products and services by adopting new technologies and business models to survive inthese challenging circumstances. Establishing alliances with companies that possess desirable technologies, funds, humanresources, and planning capabilities will also be vital in developing new businesses and new markets.
Funai Electric and all our employees will leverage our core competence in manufacturing, which has sustained thecompany for over 60 years, and put our company motto of “better products, greater confidence, more meaningfulcoexistence and coprosperity” into practice.

Corporate Commitments

Corporate Precepts

To adopt continual product improvements

Perseverance overcomes all difficulties.

To continually promote ever deeper trust

Innovation is achieved through effort.

To seek further harmony and mutual prosperity

Humanity must eventually find its expression.

Corporate Precepts

Expand the triangle of knowledge, empathy, and intention
The larger the triangle created from knowledge, empathy, and intention expands, the more we grow as human beings who are
vessels for these qualities.
If this triangle does not grow larger, that means that we, as human beings, have not grown even though we have grown older. For
example, when we pass the age of 30 or 40, we must increase our skills to a level appropriate to our age and improve ourselves ashuman beings.
The larger this triangle grows, the more a person can contribute to society.
(Source: Becoming President of Five Companies at the Age of 40 by Tetsuo Funai, Founder)04

[ At a Glance ]OUR
BUSINESS
Consolidated net sales
for FY2021: 69.6 billion yen

7% 4.9(¥ billion)
Printing Solutions Business5%

3.7(¥ billion)

Development
and New Businesses

The Group’ s consolidated net sales for FY2021 were
69.6 billion yen, a 13.4% decrease compared with theprevious consolidated fiscal year.
The decrease is attributable to the decline in sales in
the Company’ s mainstay LCD TV business, reflecting
the shrinkage of the television market on the back of thedecrease in “stay-at-home demand” triggered by the

Net Sales

69.6(¥ billion)

spread of COVID-19 which had continued until theprevious fiscal year.
In the printing solutions business, sales increased
compared with the previous fiscal year although sales oflarge-capacity inkjet printers and ink cartridges forcommercial use fell short of our business plan.
In the development and new businesses, sales
decreased from the previous fiscal year as sales ofautomotive backlight units and CT for dental clinics failed

88% 61.0(¥ billion)
Image Apparatus Business(Display and Digital Media Businesses)

to reach the plan.

Display Business

FUNAI brand Fire TV was launchedby Yamada Holdings Co., Ltd.
In North America, our mainstay market, we distribute LCD TV
under the two brands, Philips and Sanyo, maintaining the topclass market share as a Japanese manufacturer.
In the Japanese market, the brand recognition of FUNAI
has been expanding as seen in the launch by Yamada
Holdings Co. Ltd. of FUNAI brand Fire TV.

05

Digital Media Business

Enticing AV users with ahigh-definition recording function
In the North American market, we have provided 4K Ultra HD
Blu-ray Disk players since 2016. We also launched exclusive
sales of a FUNAI-brand 4K Ultra-HD Blu-ray Disc recorder at
Yamada Denki (now Yamada Holdings Group) stores in July
2018, and are continuing to expand overall sales with flatpanel
televisions.

Printing Solutions Business

Capitalizing on the diverse rangeof business needs to achieve expansionof the printer business
Funai is utilizing the expertise it has cultivated in OEM for inkjet
printer products since 1997 to expand the businesssubstantially. We manufacture printer-related products forvarious purposes in the B2B and OEM segments, such as
proprietary ink cartridges for industrial use that employ thermal
inkjet technology.

Development and New Businesses

Developing a market through Dental CT Scanning
Device and In-vehicle device, etc.
Funai Electric is meeting a wide range of needs in the medical
and healthcare segments with superior technology. We
manufacture dental CT scanning devices for the U.S. market.
In addition to the above initiatives, we are working on
development of devices for installation in vehicles and will
provide components and modules that are based on our
optical technology.

06

[ Core Competence ]CORE
COMPETENCE
DesignTargeting Even Stronger
Competitivenesssales
with flatpanel televisions
Adding higher value, reducing the number of parts, local design, and production in
the optimal location: Funai is working to achieve both high value-added products andcompetitive cost performance to make Funai even more competitive and successful in global competition.
The business environment surrounding Funai is becoming
increasingly severe due to the impact from trade friction and theemergence of global competitors.

[Our Approach to Design]

To emerge the winner in such intense competition, Funai

Highervalue-added

must succeed in two ways: Maintaining the world-class pricecompetitiveness that is a strength of Funai, and developing
appealing products that customers will choose.
To maintain cost competitiveness, we are pushing aheadon reducing the number of parts, using common parts, finding

Achieving both higher
value-added andcost-competitivenessnew local parts through overseas R&D, and reducing fixeddevelopment costs, among other efforts.
To create high value-added products that customers will
choose, we are targeting medium and long-term development

Reduction in
the numberof parts

Local design
overseasthemes and incorporating high value-added.

Production
Taking on the Challenge of Improvements in Productivity
Funai Electric continuously pursues improvements in productivity through its unique Funai Production System (FPS).
FPS enables Funai to provide high quality products with superior cost performance.
FPS, Funai’ s unique production system, detects problems in
the production process through intentional stress testing of the[Continual improvement inproductivity through FPS]

production line (reducing the number of line workers, speedingup the belt conveyor), and taking steps to improve productivity
that encourage voluntary efforts to improve.

Resolvethe problems

Perform an
intentional line
stress test

FPS

Repeatedly working through this cycle detects problems
with the current production system and fosters a mindset
among team members to take the initiative on improvement.
This enables continual improvements in productivity.

07

Take steps
to improve

Detectproblems

SalesCapturing the Needs of Markets around the World
Funai Electric deploys a sales strategy based on the unique characteristics of each market in many
locations around the world. In the North American market, which is the largest market in the world,
Funai has strengthened its relationship with leading mass retailers to develop an accurate assessmentof market needs, and maintains top share in the market. We also began exclusive sales of
the FUNAI brand through Yamada Denki (Yamada HLDGs), the largest mass retailer ofconsumer electronics in Japan, from 2017.
In LCD televisions, our core product, we hold top

provides a new line-up of FUNAI-brand TVs soldmarket share among Japanese manufacturers in the

exclusively through the Yamada Denki Group

North American market in terms of unit shipments. We

nationwide.

also began exclusive sales of FUNAI-brand products

In printer-related products, we launched the nail art

in Yamada Denki (Yamada HLDGs), stores in theprinter, a product that applies Funai’ s thermal inkjet

Japanese market from June 2017. In June 2020, we

technology, and it has received good reviews. In new

launched sales of ten television models in four series,

businesses, we are pursuing development andincluding the 7030 OLED Android TV™ series

production of nursing care and medical equipment.

equipped with an internal hard disk drive. This

[Global sales locations/Global production locations]

Main markets

Production locations

Japan

Japan

North America

OLED TVs,
othersJapan

Thailand

MexicoLCD
televisions

ThailandPhilippines(Luzon)BDs, printers

Philippines(Luzon)Philippines(Cebu)

MexicoLarge LCD
televisions

Philippines(Cebu)
Ink cartridges

08[ ESG initiatives ]Realizing Sustainable Communities

ESG Management

We are also actively pursuing environmental
initiatives as one of the cornerstonesof management.
Since the company was founded, Funai has built overwhelming trust in the imaging
device segment using its superior supply capabilities and the cost performance ofelectronic products focused on functionality as sales points.
The proprietary Funai Production System (FPS), technical skills in mechatronics,
and structure for producing and selling in the optimal global locations, which we havedeveloped in the course of our history, are our most important management assets. We
regard these as our greatest weapons in surviving intense industry competition.
We also aspire to improving quality, delivery lead times, and costs even more, anddelivering products that always meet the needs of the times.
We are actively pursuing environmental initiatives as one of the cornerstones ofmanagement as we work to achieve these things.

Initiatives for environmental conservation

Environmentally-friendly Product Development
Based on the principles contained in the Funai Group Code of Conduct, we endeavor toprotect the global environment and work to reduce the burden imposed on theenvironment from the chemicals contained in our products as one part of those efforts.
To reduce this environmental burden, we have worked with our suppliers to build asystem to manage chemical substances contained in our products and those of our
suppliers, and have taken steps to prohibit use of chemicals in products that impose alarge environmental burden.

09

A Broad Range of Local and Community Activities

Activities that contribute to andsupport communities
In the U.S., the Funai Group participates in the Children’ s Miracle
Network, which supports hospitals that treat pediatric illnesses, andparticipates in charity projects.
We have also supported Walmart and Sam’ s Club inparticipating in the Sharing & Caring support for children in needduring the holiday season, and donated Funai TV and DVD products.
We hope that these activities will make children’ s dreams cometrue and give them the strength and courage to fight their illnesses,
and that they will contribute to the community in general by
supporting families, sponsors, and those who donate.

Human Resource Education
New employee training is provided in April every year to equip new
employees with basic knowledge as full-fledged members ofsociety and teach them how to perform their work. Training in an
overseas plant for three months is provided regardless of job
classification and employees learn the thought process of the
proprietary Funai Production System (FPS). Continuous skills
improvement training by an instructor is offered internally to
encourage ambitious employees to pursue self-education to
improve business skills and technical skills.
Various kinds of English courses are provided to equip
employees with the language skills essential as global humanresources, and we are working to maintain their motivation toInitiatives in Employee
Health Management

improve their English skills by introducing the TOEIC score as arequirement for advancement and promotion.

We also actively engage in employee health management to ensurethat all employees come to work in a healthy condition anddemonstrate their personal capabilities. All employees participate incompany health drive efforts. We also provide them with information
on health and nutrition, and have an industrial physician conduct
health management courses.
Funai formulated a mental health promotion plan based on the
Ministry of Health, Labour and Welfare’ s Guidelines for Promoting
the Mental Health of Workers. We have put in place an internal
structure and set up a consultation desk as part of our mental
health promotion measures.

10

[ History and Product ]COMPANYHISTORY & PRODUCTHISTORY
1960s

August 1961 FUNAI ELECTRIC CO., LTD. established in Ikuno Ward, Osaka City, capitalized at
20 million yen. (Transistor radio business of FUNAI LIGHT MACHINERY MFG.
CO., LTD. spun off as an independent company)

2000s
March 2000 Listed on the First Sections of the Tokyo Stock Exchange and the Osaka
Securities Exchange
November 2000 FUNAI LIGHT MACHINERY MFG. CO., LTD. Acquired through anabsorption-type merger

March 1964 CHUGOKU FUNAI ELECTRIC CO., LTD. (now a consolidated subsidiary)established as a production company in Fukayasu-gun (now Fukuyama City),
Hiroshima Prefecture

March 2001 Fiscal year-end changed from June 15 to March 31
July 2003 FUNAI (THAILAND) CO., LTD. (now a consolidated subsidiary) established in
Nakhon Ratchasima, Thailand as a production subsidiary

May 1968 FUNAI ELECTRIC COMPANY OF TAIWAN established in Kaohsiung, Taiwan as thefirst large production plant overseas

October 2006 FUNAI ELECTRIC (POLSKA) Sp. z o.o. established in Lubusz, Poland as a
production subsidiary

April 1969 Construction of new headquarters building completed in Daito City, Osaka
Prefecture (current location of headquarters)

October 2006 FUNAI SERVICE CORPORATION (now a consolidated subsidiary) establishedin Ohio, U.S.A. as a service subsidiary

1970s

September 2007 BROADTEC TV R&D CENTER SDN. BHD. (now FUNAI MALAYSIA R&D SDN.
BHD.) established in Malaysia as a research and development center

September 1970 FUNAI AMERICA ELECTRIC SERVICE CORP. (later, FUNAI USA CORPORATION)
established in the U.S. as a sales subsidiary

June 2008 P&F USA, Inc. (now FUNAI CORPORATION, INC., a consolidated subsidiary)established in Georgia, U.S.A. as a sales subsidiary

September 1976 Headquarters relocated to Daito City, Osaka Prefecture

April 2009 P&F MEXICANA, S.A. DE C.V. (now a consolidated subsidiary) establishedin the State of Mexico, Mexico as a sales subsidiary

1980s
June 1980 FUNAI ELECTRIC TRADING (EUROPE) GmbH established in Hamburg, Germany
as a sales subsidiary

2010s

June 2011 FUNAI ELECTRIC R&D (SHENZHEN) CO., LTD. established in China as a
research and development center

July 1983 Tokyo Branch Office established in Chiyoda-ku, Tokyo
March 1987 Full-scale entry into the domestic market

April 2013 FUNAI ELECTRIC PHILIPPINES INC. (currently a consolidated subsidiary)established in Batangas Province, Philippines as a production subsidiary

1990s
March 1992 HIGHSONIC INDUSTRIAL LTD. (now FUNAI ELECTRIC (H.K.), LTD., a consolidated
subsidiary) established in Hong Kong to oversee contract manufacturing in
Guangdong, China
January 1996 FUNAI SERVICE CO., LTD. (now a consolidated subsidiary) established as adomestic service subsidiary1989

February 1999 Listed on the Second Section of the Osaka Securities Exchange

1977
1971

1968
1963

1959

Open Reel-to-reelTape Recorders

TV/VCR
CombosCVC VCRs

1985
Microwave
Ovens

Stereo CassetteTape Decks

Radio Cassette Players

1986

CRT TVs

8-Track
Car Stereos

Transistor Radios

1985

1980

1970
1960

Laser Disk
Players

1980

1983

1988

Cordless
Telephones

Faxes

1971
Cassette Car Stereos

11

1969

1983

1987

Home Stereos

VHS Videos

Auto
Bakeries

2020sMay 2020 Acquired PreXion Corporation as a subsidiary
May 2021 The tender Offer for Share Certificates ETC. of FUNAI ELECTIRC CO.,LTDthat has been conducted by SHUWA SYSTEM HOLDINGS CO.,LTD wascompleted

April 2013 Acquired 100% of the shares in a manufacturing subsidiary of Lexmark International (Philippines),
Inc. that produces printer-related products (now FUNAI ELECTRIC CEBU, INC., a consolidated
subsidiary)
June 2015 Switched to the format of a company with an Audit & Supervisory Committee

July 2021 Koji Bando becomes the Chairman and CEO

April 2016 FUNAI MANUFACTURING, S.A. DE C.V. (now a consolidated subsidiary) established in Tijuana,
Mexico as a production subsidiary

August 2021 The Company Shares is delisted from Tokyo Stock Exchange, Inc.

June 2017 Exclusive sale of FUNAI-brand televisions and Blu-ray Disc recorders at Yamada Denki began

October 2021 Switched to the format of a company with an auditor

July 2017 Tetsuro Funai, the company founder passed away

June 2022 Tomokazu Ueda becomes President

April 2018 Absorption-type merger of FUNAI CORPORATION, INC. and P&F USA INC., with P&F USA INC.
(now a consolidated subsidiary) as the surviving company
June 2019 Entered business alliance with NTT Plala, Inc.

2020

October 2019 Entered business alliance with ROKI Co., Ltd.

2021
LCD Monitor for gaming

2010

2018
OLED

2012
LED Lighting

2000

2008
Blu-ray Disc
Players

2000

1990

Laser Beam
Printers

1994

2019

2022

Air Conditioners

Nail Art Printer“CureNel”

The new industrial
ink cartridge “Zion”

2013
2002

2009

LCD TVs

Blu-ray Disc
Recorders

Stick-Type SmartTV Devices

1997
Inkjet Printers

2002

2004

Projectors

Digital Still
Cameras

1999

2004

DVD Players

DVD Recorders

2022
Fire TV12

[ Corporate information ]CORPORATEGOVERNANCE
Overview of Corporate Governance

General Meeting of Shareholders

The Funai Electric Group has the following view of corporate
Accounting Auditors

governance. We aim to respond to changes in the management
environment and continually strive to enhance corporate value by(Discretionary committees)increasing the transparency of management for shareholders,Nomination
Committee

consumers, business partners, local communities, employees, andall other internal and external stakeholders, and ensuring soundGeneral Meeting ofCorporate Auditor

Board ofDirectors

and efficient management and swift decision-making.

Compensation
Committee
Internal Investment
and Loan Committee

We have established an executive officer system to facilitate
Representative Director and President

agile decision-making and prompt execution of business based on
this philosophy.

Internal Control
Committee

Directors responsible for business/Officers

Funai also established the Funai Group Code of Conduct andthe Funai GroupGroup

Procurement Policy, which is based on the

Code of Conduct. Under this code of conduct and policy,

Audit OfficeBusiness divisions & subsidiaries

we are promoting corporate social responsibility (CSR) activities.

Overview of the Corporate Governance
Structure and Reasons for
Adopting this Structure

Advisory Bodies

We have adopted the structure of a company with auditors, and haveas committee members by the Board of Directors. As an advisory body toestablished a Board of Directors, Auditors and Accounting Auditors

the Board of Directors, this committee recommends candidates for director

as our corporate governance structure.

positions to the Board of Directors, thereby ensuring transparency andWe have established an executive officer system to facilitate

The Nomination Committee consists of directors who have been appointed

objectivity in the candidate selection process.

prompt execution of business. In addition to the Auditors, we have

• Compensation Committee

also established the Nomination Committee, Compensation

The Compensation Committee consists of directors who have been

Committee, and Internal Investment and Loan Committee to serve asappointed as committee members by the Board of Directors. This

discretionary advisory bodies to the Board of Directors. These

committee has been delegated the authority to determine thecommittees ensure objectivity and transparency in the process forcompensation for directors and executive officers, thereby ensuring

making important decisions.

transparency and objectivity in the compensation determination process.

Board of Directors

13• Nomination Committee• Internal Investment and Loan Committee
The Internal Investment and Loan Committee consists of directors and

The Board of Directors consists of nine directors (one of whom is an

executive officers whom the president has appointed as committee

outside director). It aims to make prompt decisions. The outside

members. This committee examines and discusses the contents ofdirectors, who have no significant conflict of interests, ensure soundindividual investment and lending projects of importance to the Company,

and transparent management by participating in decisions made bythereby ensuring transparency and objectivity in the process for deciding

the Board of Directors.

whether or not to proceed with individual investment and lending projects.

FUNAI SERVICE CORPORATIONFUNAI LEXINGTONTECHNOLOGY CORPORATIONFUNAI ELECTRIC (H.K.), LTD.
FUNAI ELECTRIC R&D(SHENZHEN) CO., LTD.

FUNAI ELECTRIC CO., LTD.
OSAKA HEAD OFFICEFUNAI SERVICE CO., LTD.

P&F MEXICANA,
S.A. DE C.V.
Graphic Corporation

FUNAI (THAILAND) CO., LTD.

TOKYO HEAD OFFICE
PreXion Corporation
SYSTEMS& TRADING INC.

FUNAI MALAYSIA R and D SDN. BHD.
FUNAI ELECTRIC PHILIPPINES INC.
FUNAI ELECTRIC CEBU, INC.

CHUGOKU FUNAI ELECTRIC CO., LTD.

FUNAI MANUFACTURING,
S.A. DE C.V.
FUNAI TRADING CORP.
FUNAI CORPORATION, INC.

Name

FUNAI ELECTRIC CO., LTD.

Offices and subsidiaries

Established

August 1961

OfficesHead office

7-7-1 Nakagaito, Daito, Osaka 574-0013

TOKYO HEAD OFFICE
Sales
subsidiaries

TEL +81-72-870-4303 FAX +81-72-871-1112
URL https://www2.funai.co.jp/en/index.html
Capital31.320 bn yen (as of Mar. 31, 2022)

Net sales

69.697 bn yen (fiscal year ended Mar. 31, 2022)

Employees

2,144 (as of Mar. 31, 2022)

Business

Electrical equipment
Display Businesscategory
Principal
businesses

OSAKA HEAD OFFICEFUNAI CORPORATION, INC.
FUNAI TRADING CORP.
P&F MEXICANA, S.A. DE C.V.

Production
subsidiaries

CHUGOKU FUNAI ELECTRIC CO., LTD.
FUNAI MANUFACTURING, S.A. DE C.V.
FUNAI ELECTRIC (H.K.), LTD.

LCD TVs/OLED TVs

FUNAI (THAILAND) CO., LTD.

Digital Media Business Blu-ray Disc players/recorders
Printing Solutions
Business

Printers
Ink cartridges

Development andNew Businesses

Other devices

FUNAI ELECTRIC CEBU, INC.
FUNAI ELECTRIC PHILIPPINES INC.
Development FUNAI ELECTRIC R&D (SHENZHEN) CO., LTD.
subsidiaries FUNAI MALAYSIA R and D SDN. BHD.
FUNAI LEXINGTON TECHNOLOGY CORPORATION
Affiliatedsubsidiaries

FUNAI SERVICE CO., LTD.
Graphic Corporation
PreXion Corporation
FUNAI SERVICE CORPORATIONSYSTEMS & TRADING INC.

Executives (as of June 30, 2022)
Tomokazu Ueda

Corporate Auditor Corporate Auditor Kazuo Uga

Vice Chairman

Hideaki Funakoshi

Officers

Director Officer

Takeshi Ito

Director Officer

Hidehiko Funai

Directors President and CEO

Officer

Masanori Sakakibara

OfficerTadahiro Akahodani

Director and Executive advisor Akihiro Kuromiya
Director

Motoyoshi Adachi

Director

Fumiaki Kidera

Director

Kei Mima

Outside Director

Akihiro Sako14

7-7-1 Nakagaito, Daito, Osaka 574-0013, Japan
Phone +81-72-870-4303 Fax +81-72-871-1112
URL https://www2.funai.co.jp/en/index.html